New Decade; New Codec

Those of you in the television broadcast industry will know that once in every decade a new video compression scheme appears that delivers even greater efficiencies over previous generations. MPEG-2 held the crown through the 1990’s, H.264 (AVC) took centre stage during the mid-2000’s, then H.265 (HEVC) promised to depose all others from around 2012 onward but hasn’t yet succeeded in gaining the title of most ubiquitous codec. This isn’t due to the technical credibility of the codec – undeniably HEVC is gaining traction with Pay-TV operators and streaming media services, with the onset of 4K UHD making it increasingly attractive – but HEVC continues to be encumbered by awkward licensing terms which make it challenging, and potentially costly, for video services and product manufacturers to adopt. With UHD rapidly becoming commonplace in developed markets, the industry is once again seeking alternative codecs that provide even further efficiencies in video compression.

A successor to HEVC is under active development. Known as VVC (Versatile Video Coding), the standard is due for completion in October 2020 and is likely be approved as H.266 (VVC). Working Draft 3 of the VVC specification was released in October 2018, so the work towards standardisation is broadly on track. However, the licensing model for VVC remains unclear until the standard is complete and essential features of the codec are finalised. The Media Coding Industry Forum – formed in September 2018 – is working to avoid the problematic patent situation that has hitherto thwarted HEVC’s widespread adoption across the industry.

Meanwhile, AV1 is regarded as the natural successor to VP9, developed and promoted by the Alliance for Open Media. Royalty-free status affords integration of software decoders for AV1 in mainstream web browsers and tools such as VideoLAN, so evaluation is possible on PCs. Hardware decoders for AV1 are not yet available. Encoding to AV1 presently requires significantly more CPU resource than HEVC, plus the improved video quality may not be perceptible to most viewers. Encode times will improve with the advent of professional AV1 encoders, in contrast with VVC which industry experts state increases encode complexity only by a factor of four over its predecessor, HEVC. So, questions remain over adoption of AV1 for all but the largest SVoD providers, because the savings in bit-rates may not justify re-encoding vast media libraries to reduce distribution costs; YouTube, Netflix and Facebook have been active in trialling AV1.

Alternatives, such as XVC (Extreme Video Coding) from Divideon, attempt to avoid patent issues by enabling various coding tools and compression schemes to be included dependent upon individual licensing terms. XVC is considered to outperform both AV1 and HEVC but is generally regarded as an outsider in the industry. XVC would be a viable choice for products where decoding can be executed entirely in software; but hardware decoders are the key to securing more extensive adoption and there are concerns over whether patented technology could be redacted in such a fixed implementation, should licensing terms become unfavourable.

Codecs adopted by the broadcast industry use hardware acceleration within the system-on-chip (SoC), which removes the processing load from the main CPU, freeing this for other tasks such as running the operating system. Hardware decoders are vital to codec implementation in STBs and digital TVs, whereas software decode is feasible in products such as smartphones and PCs that have higher performing CPUs.

It’s difficult to say which codec will emerge as the winning video codec for the 2020’s; it’s plausible that each could enjoy widespread usage as broadcasters may favour VVC and streaming services could utilise XVC or AV1. The market needs a codec that delivers high compression efficiency, reasonable encoder complexity, broad decoder support and a clear licensing scheme. Whatever the outcome, codec changes are positive for the digital TV industry because it seeds STB and television replacement cycles as broadcasters and SVoD providers begin to take advantage of improved compression schemes. Futuresource forecast this transition commencing early in 2022, as VVC and AV1 become more extensively available in hardware-based SoC implementations.

Here at Futuresource Consulting we deliver specialist research and consulting services, providing market forecasts and intelligence reports. Since the 1980s we have supported a range of industry sectors, which has grown to include: CE, Broadcast, Entertainment Content, EdTech and many more.